A senior Bank of Japan official has warned G7 nations that the clock is ticking on a common framework to regulate cryptocurrency, according to a Reuters report.
The Bank of Japan official urged G7 policymakers to speed up efforts to reduce the risk of evading sanctions backed by cryptocurrencies in light of the ongoing conflict between Russia and Ukraine.
He told that appropriate measures must be taken before cryptocurrencies overturn the global settlement system.
Kazushige Kamiyama, head of the Payment and Settlement System Division at the Bank of Japan, told Reuters:
The use of stablecoins, allows the creation of a single global settlement system.
Kamiyama went on to explain:
The priority is to update the existing rules as the crypto industry develops rapidly.
He added that the G7 is working together while exchanging information on current developments, and that Japan is very determined to regulate cryptocurrency to counter Russian President Vladimir Putin's invasion of Ukraine.
Earlier this week, Chief Cabinet Secretary Hirokazu Matsuno informed the Japanese government of the proposed new amendments to the Foreign Exchange and Foreign Trade Law.
The amendments will force cryptocurrency exchanges in line with traditional banks to impose sanctions.
New G7 rules may affect Japan's plans for a digital yen.
Any new rules agreed by the Group of Seven industrialized nations — particularly around money laundering or privacy — could have spillovers when it comes to Japan's ambitions to roll out its central bank digital currency (CBDC).
The Bank of Japan already has a new digital yen in the works.
The project is scheduled to enter the next phase of development in April.
What Kamiyama also told Reuters:
Given the number of central banks in developed countries move collectively and dramatically and at the same time to develop digital currency for central banks, which may cause significant changes in the settlement system in the future.
@natalia-irish